Investec is also predicting GNP growth of 6.5pc this year and 5.2pc next year. It said its reasons for upgrading its forecast included recent figures which show that GDP expanded by 7pc in the first half of the year and growth in all three PMI indicators (construction, manufacturing and services).

Mr O'Sullivan added: "The upturn is also contributing to a marked strengthening in the public finances, with the general government deficit now expected to come in at only 1.4pc of GDP this year. We previously pencilled in 2.1pc."